"Now more than ever, we should remind ourselves that monthly trends, often sparked by non-housing economic trends, do not change some fundamentals about the market."
Average house prices across England and Wales increased by 2.4% in April - the lowest rate of annual increase since June 2020 and the eighth consecutive month the annual rate has fallen, the latest e.surv data shows.
On a monthly basis, the average price fell by around £1,940, or 0.5%. This fall was only £260 less than the fall in March, but the two months together represent the largest decrease since April 2021, the month after the stamp duty holiday in England and the LTT tax holiday in Wales were originally due to be withdrawn.
However, the fall in price in April is relatively minor, especially when compared to the cumulative £43,360 rise in prices since August 2021. In fact, prices have risen by around £60,000, or 19%, since the start of the pandemic in March 2020, compared to a fall of £4,600 from the peak price achieved in October 2022, at £379,647.
The changes in average house prices over the last twelve months remain positive in nine of the ten GOR areas, with Greater London being the only area where prices have fallen over the period. However, all ten regions now have a rate of growth of 6.0% or less – just three months earlier, in December 2022, the highest regional rate was nearly double this at 11.0%.
Since last month, the rate of growth has fallen in eight of the ten areas, with only the North East and Greater London seeing higher growth this month compared to last. The largest fall was in the West Midlands, down by 1.8% from 7.8% to 6.0%, followed by the North West, down 1.3% from 4.1% to 2.8%.
Despite having the biggest fall in prices, the West Midlands remains the top region for the third month running in terms of the rate of price growth, at 6.0%. This month Herefordshire, Warwickshire and the West Midlands unitary authority (which includes Birmingham) have been the region’s top performers, with annual price growth of 11.8%, 8.9% and 6.8% respectively.
Wales, with 5.3% growth, is in second place this month, having pushed the South West region into third position. In Wales, there are three local authority areas, all in South Wales, with price growth in excess of 10%, these being the Vale of Glamorgan (19.0%), Newport (11.6%) and Bridgend (10.1%).
Greater London is the only GOR area with negative growth, at -1.9%, although this was actually 0.2% higher than the -2.1% seen in the previous month. In March 2023, 17 of the 33 London boroughs saw prices rise on an annual basis (four fewer than the previous month). Broadly, it continues to be the most expensive inner areas that are recording falling prices – impacting eight of the top ten boroughs ranked by price. For example, in the City of Westminster – which is ranked in second place in London in terms of its average value – house prices have fallen by -33.2% over the last twelve months, while in Kensington and Chelsea – the most expensive borough in London – prices fell by -17.1%. Meanwhile, 12 of the 16 lowest-priced London boroughs have seen their prices rise over the last twelve months.
Richard Sexton, director at e.surv, commented: “While many commentators have focussed on the reduction and in some instances falls in house price growth, it’s important to put these into context. Since the pandemic in March 2020, we have seen house prices rise by £60,000 or 20% and the subsequent reduction of just under £5000 from the peak in October 2022 is a good place from which to do this.
“Now more than ever, we should remind ourselves that monthly trends, often sparked by non-housing economic trends, do not change some fundamentals about the market.
“The ongoing lack of supply and current affordability issues are stymying activity but also support prices in part because there simply is not enough of the right kind of housing in the market. The extent to which this is the case has been the acknowledgement by both main political parties this month that housing will be a key election issue. We have heard already about the mooted return of Help-to-Buy and other market led mortgage products to support new buyers.
“We are only just past April – a key month for buyers and sellers and it is too early to say whether this key month in the housing calendar will herald a return to more normal growth trajectory. But whatever the next couple of months bring, our data suggests undue levels of pessimism are probably misplaced.”
